This article appeared in Infrastructure Partnerships Australia's 2026 Partnerships Conference magazine, September 2026.
From unsealed regional routes to busy urban motorways, governments across Australia face the big task of maintaining, upgrading, and expanding the roads that underpin Australia's productivity.
But as the familiar click of the petrol nozzle is increasingly replaced by the hum of the electric vehicle (EV) charger, a new reality is emerging: the decades-old model for funding our roads - fuel excise - is increasingly unfit for purpose.
For more than a decade, organisations like Infrastructure Partnerships Australia have been building the case for road user charging (RUC). What was once a long-term policy discussion is fast becoming a near-term priority.
Global energy volatility means that Australia is transitioning to cleaner vehicles faster than many expected. In June 2026, Australian EV sales hit an all-time record, capturing 35.8% of the new passenger car market. Alongside this, the Federal Government's New Vehicle Efficiency Standard is incentivising manufacturers to introduce more fuel-efficient and hybrid vehicles. As more drivers switch to vehicles that use little or no fuel, the revenue base underpinning fuel excise continues to erode.
This has further progressed the conversation around how we pay for infrastructure, with fuel excise forecast to effectively disappear as a government revenue source by 20501.
After years of discussions, Australia is standing at the doorstep of reform. And minds are now turning to how to build a system that works for everyone - governments, industry and crucially, for motorists.
It must be fair, simple and transparent from day one; people want to know what they're paying, and they want to see a clear link between revenue and improved roads. Our own experience shows there is also a strong appetite for added value: things like rewards points and personalised journey data.
The good news is that Australians are ready for this conversation. Recent research jointly commissioned by Transurban shows 59% surveyed support replacing the fuel excise with a road user charge. Among EV and hybrid drivers, who are already living this transition, that support jumps to 71%.
The research also revealed that 78% of people are worried about the state of Australian roads. When motorists can see a direct, transparent link between the fees they pay and the money spent on maintenance and upgrades, support for reform increases.
Underpinning all of this is the need for genuine choice and privacy. People should have flexibility in both the services they use and the way their data is collected and managed.
That extends to different options for data collection - from odometer photos to in-car devices and mobile apps - all designed with customer experience at the core.
We don't have to look far to see the RUC transition in action. New Zealand is already leading the way, moving toward a user-pays model by expanding its distance-based charging to light EVs and hybrids. It provides a strong example of how a modern, user-pays road funding system can operate in practice.
Back home, Australia faces the task of moving from concept to reality, and that is where industry has an important role to play.
Transurban has a long history of partnering with government and industry to explore RUC solutions that balance policy objectives with the needs of drivers.
In the US, we're supporting a multi-state mileage-based user fee pilot across 20 states and Washington D.C., as part of our ongoing partnership with the Eastern Transport Coalition. The pilot is giving stakeholders hands-on experience with reporting technology and alternative funding approaches.
In Australia, discussions around RUC are increasingly focusing on zero-emission heavy vehicles. Although they play a critical role in moving freight efficiently, heavy vehicles contribute disproportionately to road wear and tear. Given the freight sector's mature use of telematics, it is well positioned to support more sophisticated charging arrangements based on distance travelled or location.
Recognising this opportunity, Transurban has partnered with major freight and logistics operators on a new heavy vehicle RUC trial. The trial will test real-world technology and operational models, using live freight use cases and leveraging the existing telematics systems of commercial vehicle fleets operated by our trial partners across Australia.
Our focus is on understanding operator needs, preferences and pain points, while exploring how to streamline the customer experience. We'll be using trial insights to provide evidence based advice to government, so any future system is practical, industry informed and supports Australia's productivity.
Ultimately, a sustainable road funding model is about more than balancing government budgets - it is essential to keeping Australia's growing cities and regions moving.
A well-designed RUC system would ensure those who use the roads contribute fairly to their upkeep, while freeing up government funding for other critical transport priorities.
The foundations are in place and the case for reform has been made. The real question is no longer whether Australia should move towards distance-based charging, but when and how.
As fuel excise revenue continues to decline, relying on a funding model designed for the last century will only deepen the gap between the infrastructure Australians expect and the revenue available to support it.
With careful design, robust technology and genuine public engagement, Australia has the opportunity to modernise road funding in a way that is fairer, more sustainable and is designed with the customer front of mind.
Learn more about Transurban and road user charging.
1 Parliamentary Budget Office (Cth), 'Shrinking Revenue Bases in Excise Taxes', Australia's Tax Mix (Budget Explainer, 14 November 2024).
